Less than a day after parents received alarming news regarding the financial troubles of Playtime Preschool, a significant childcare facility in Broken Hill, the center announced its immediate closure. The preschool, which serves around 70 children, disclosed that it had accumulated nearly $1 million in debt, primarily with the Australian Tax Office (ATO).
Parents were informed that the preschool would enter voluntary administration and that a temporary closure was imminent, though no timeline for reopening was provided. Kathleen Atkins, a mother of a 3-year-old enrolled at the center, expressed her frustration, especially after she had prepaid for the semester just the day before. “I just wonder how it got to this point and why a preschool would be in debt to the ATO,” she stated, emphasizing her concern for her daughter’s speech development, which has already faced delays.
Playtime Preschool, a not-for-profit organization managed by a committee elected annually, fell into chaos after newly appointed president Ian Murphy took office in April 2024. Struggling to decipher the facility’s financial accounts, he initiated a thorough investigation spanning several years, identifying significant outstanding liabilities. The investigation revealed a staggering tax burden, including $150,000 in unpaid superannuation, which has since been addressed, and a considerable $700,000 in GST and PAYG withholding obligations, along with an estimated $300,000 to $350,000 in penalties and interest.
Scott Andersen, the principal at the insolvency firm Worrells tasked with reviewing the situation, determined that the financial troubles had developed over a span of five to six years, although the specific causes remain unclear. He stated that the accumulated debt and ongoing administrative costs warranted an indefinite closure.
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The ATO’s rejection of the committee’s proposed repayment plan was the tipping point for the preschool’s administration. With the tax office demanding a more viable solution, Murphy lamented, “We’ve tried everything we can to keep the place open and it just didn’t work,” adding that efforts are underway to reestablish the facility as “Playtime 2.0.”
The closure of Playtime Preschool is particularly concerning for local families, as it represents one of the very few early childhood education options available in Broken Hill, a region already facing a childcare crisis. Luke Driscoll, whose family waited 18 months for a spot at Playtime for their 4-year-old daughter, voiced his deep concerns. “There’s already a critical shortage of childcare places in Broken Hill,” he argued, urging both state and federal governments to address the deficiencies in childcare services within the regional community.
In response to the closure, Broken Hill City Council acknowledged the impact on the community and committed to exploring measures to support the ongoing operation of the preschool in the upcoming year. Meanwhile, the administrators are expected to provide a comprehensive report to creditors by early to mid-December, shedding light on the future of the preschool and its financial recovery efforts.
